Electronic Arts 2012 Annual Report Download - page 69

Proxy Statement
The CoC Plan does not provide for any additional payments or benefits (for example, tax gross-ups or
reimbursements) in the event that the payments under the CoC Plan and other arrangements offered by the
Company or its affiliates cause an executive officer to owe an excise tax under Section 280G of the Internal
Revenue Code. However, the CoC Plan provides that, if an executive officer would receive a greater net after-tax
benefit by having his or her CoC Plan payments reduced to an amount that would avoid the imposition of the
Section 280G excise tax, his or her payment will be reduced accordingly.
As a condition to each executive employee’s right to receive the payments and benefits provided under the CoC
Plan, the executive is required to execute a waiver of claims against the Company and will be bound by the terms
of a non-solicitation agreement prohibiting the executive, for a one-year period following his or her termination
of employment, from soliciting employees to leave the Company.
Performance-Based RSU Programs
Messrs. Riccitiello, Barker, Gibeau and Moore were each granted performance-based RSUs in May 2008 (the
“Fiscal 2009 Performance-based RSUs”). The Fiscal 2009 Performance-based RSUs may be earned based upon
the Company’s achievement of one of three progressively higher adjusted non-GAAP net income targets (as
measured on a trailing-four-quarter basis). These targets range from approximately two to three times the
Company’s non-GAAP net income for fiscal 2008 and can be earned though the performance period ending on
June 30, 2013. Pursuant to the terms of the Fiscal 2009 Performance-based RSUs, and subject to the timely
execution of a severance agreement and release, in the event of a change of control of the Company prior to the
expiration of the performance period, all of the unvested Fiscal 2009 Performance-based RSUs will be
automatically converted into time-based restricted stock units, which will vest on June 30, 2013, subject to two
exceptions. If the recipient’s employment is terminated without “cause” by the Company or if the recipient
resigns for “good reason” (as such terms are defined in the grant agreement), within one year of the change of
control event, the recipient’s Fiscal 2009 Performance-based RSUs will vest upon the date of termination of
employment and if, during the two months immediately preceding a change of control, the recipient’s
employment is terminated by the Company without “cause”, and such termination is made in connection with the
change of control, as determined by the Committee in its sole discretion, then the recipient’s Fiscal 2009
Performance-based RSUs will vest on the date of the change of control event. To the extent that the acceleration
of the Fiscal 2009 Performance-Based RSUs, when taken together with other arrangements offered by EA or its
affiliates, would cause a recipient of the Fiscal 2009 Performance-based RSUs to owe an excise tax under
Section 280G, the recipient’s award would be reduced to an amount that would not cause the Section 280G
excise tax to apply. Notwithstanding the foregoing, if the recipient would receive a greater net after-tax benefit
by having the Section 280G excise tax apply, the reduction described in the previous sentence would not be
made.
Messrs. Riccitiello, Gibeau and Moore were each granted performance-based RSUs in June 2011 (the “Fiscal
2012 Performance-based RSUs”). The Fiscal 2012 Performance-based RSUs may be earned based upon the
relative total stockholder return (“TSR”) percentile ranking of the Company as measured over a three year
performance period with one, two, and three year TSR measurement periods. Pursuant to the terms of the Fiscal
2012 Performance-based RSUs, and subject to the timely execution of a severance agreement and release, in the
event of a change of control of EA prior to the expiration of the three-year performance period, the Committee
shall certify the relative TSR percentile ranking of the Company as of the effective date of the change of control
and that relative TSR percentile ranking will be applied to determine the number of shares that vest on each
remaining vest date in the performance period.
The vesting of the Fiscal 2012 Performance-Based RSUs may be accelerated to the earlier of: (a) the date on
which, during the time period beginning on the effective date of the change of control and ending on the first
anniversary of the effective date of the change of control, the recipient’s employment is terminated without cause
by EA or is terminated for good reason by the recipient; or (b) as of the effective date of the change of control if,
during the two months immediately preceding the effective date of the change of control, the recipient’s
employment is terminated by EA without cause, and such termination is made in connection with the change of
control, as determined by the Committee in its sole discretion. To the extent that the acceleration of the Fiscal
2012 Performance-Based RSUs, when taken together with other arrangements offered by EA or its affiliates,
would cause a recipient of the Fiscal 2012 Performance-based RSUs to owe an excise tax under Section 280G,
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